Monday, 18 January 2016

Gold Jewellery Scams

heavy chain braceletBuying jewellery overseas can be fraught with danger. We are not saying you can’t get a good deal on a genuine item, but if you aren’t careful you may not get what you were expecting and you may have no recourse.

Often it won’t be until you get home from your trip that you discover you haven’t been given what you thought you had paid for. Buying from overseas internet sellers can create exactly the same issues. How can you get your money back when you are here and they are thousands of miles away?

Let’s take the example of buying a men’s gold chain from a merchant overseas.

You know the style, how long and wide the necklace should be and you want 18ct yellow gold. An on-line seller has just what you want as described and has a beautiful photo of your new chain. The price may be considerably lower than in shops here in Australia and it seems like a great deal, so what could possibly go wrong?

  • When buying on the internet, there is no guarantee that the photo you are looking at is of the actual gold chain that you are buying.

  • The description may say 18ct solid gold, weight 65 grams, 60cm long and 8mm wide, which is exactly what you wanted to buy. Until you hold it in your hand you are solely relying on the accuracy of their description.

  • The photo shows a 750 stamped into the clasp, but is the hallmark genuine?

There is nothing stopping an unscrupulous seller from finding a photo of a gold chain on the internet and using it on eBay or another website.


Hallmarks are stamped into the metal of the chain, usually on the clasps with a heavier chain or on the link joining the clasp to the chain on finer (smaller) necklaces and bracelets. Very rarely is every link in a chain stamped.

A hallmark stamp of 750 means 18ct solid gold, 375 means 9ct solid gold and 583 means 14ct solid gold. Actually the hallmark stamp SHOULD indicate the gold content of the item stamped. You can buy these metal hallmark stamping tools on eBay for a few dollars each and not everyone who owns one is a real jeweller.

It is very easy to get hold of a brass or copper chain and have it gold plated cheaply and then stamp 750 on it. It will look real for a few days and then the plating wears off.

A massive amount of silver jewellery coming from China is stamped 925 for sterling silver and sells at less than 25% of the cost of silver bullion (weight for weight). When you buy something at well below the cost of the raw materials and think you got a bargain, think again. The silver plating wears off in days and allows you to marvel at the beautiful yellow shine of the brass from which it is really made.

Gold Testing Kits

A gold acid (scratch) test will quickly show that a gold plated chain is not solid gold. A gold testing kit is reasonably cheap and easy to use. Just pulling one out of your pocket may be enough to expose a dishonest seller.

A more subtle and harder to detect scam is passing off ‘gold filled’ or ‘gold clad’ jewellery as solid gold. Gold filled and gold clad jewellery is made from a base metal (often brass) with a thicker layer of gold mechanically bonded to it. When it is sold as gold filled, it must contain at least 5% gold by weight. This creates a thicker layer than gold plating, but it will still wear off in time.

A scratch test will show the carat rating of the gold cladding, so this can appear to be solid gold.

A gold chain should feel heavy for its size. As brass is much lighter than gold, a golf filled chain just doesn’t feel solid (heavy) enough. This should be a strong clue that you aren’t getting a solid gold chain.

If you are in an overseas market and find a gold dealer, consider this: If they have a massive range of solid gold chains for sale laid out on a table to touch and feel, they may well have hundreds of thousands of dollars of gold right there in front of you. Would you set up a stall like this using real gold of this value? Unlikely unless you employ about 10 guys carrying sub-machine guns.

Genuine jewellery stores keep everything secured in glass cabinets so you can look but not touch and take out one item at a time for you to examine. Why? Security, real gold costs real money.

What to look for

Obvious signs you should look out for:

  • The jewellery just doesn’t feel heavy enough for its size.

  • The workmanship is not great, the joins in the links are clearly visible and don’t meet closely and neatly.

  • The prices are too cheap or the salesman pushes too hard and keeps lowering the price.

  • The hard sell – “it’s the last one”, “our prices are going up tomorrow”, “my child/wife/mother is sick and I need to sell today”

If you intend to shop for ‘cheap’ jewellery overseas, know what the prices are here at home. The cost of precious metals is a global value. Typically gold is valued by the ounce in US dollars EVERYWHERE IN THE WORLD. Gold is simply not cheaper in the poorer countries.

When buying in your home country, you have the protection of the police in case of fraud and various government bodies including the ACCC who can act to deal with dishonest sellers. Pay Pal and your bank can stop payments and reverse transactions where the goods supplied are not what was advertised. It is much harder to take action against a dishonest seller in another country and a much greater risk unless you are dealing with a multi-national company like Tiffany & Co. or De Beers.



Gold Jewellery Scams

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